Ghana saves $500m a year by switching from imported fuel to gas, says minister

Ghana is saving about $500m (£390m) annually by using more natural gas to generate electricity, rather than relying heavily on imported liquid fuels, Energy and Green Transition Minister Dr John Abdulai Jinapor has said.

The minister said the increased availability of gas had reduced the country’s need for crude oil and other costly fuels used to power thermal plants.

Speaking at the launch of the Petroleum Commission’s 15th anniversary celebrations on Tuesday, 18 August, Dr Jinapor said stronger domestic gas production had brought substantial financial benefits to Ghana’s power sector.

He linked the savings to improved cooperation between the government and petroleum operators, including partners involved in the Jubilee field and ENI.

Ghana had previously depended significantly on imported crude oil and other liquid fuels to meet its electricity-generation requirements. That dependence left the country more exposed to fluctuations in international fuel prices and increased the cost of producing power.

However, Dr Jinapor said the expansion of domestic gas production had helped change the balance. Greater use of Ghanaian gas has improved the country’s energy security while reducing its reliance on imported fuels.

The minister said the government would continue to make the most of Ghana’s petroleum resources, while also increasing the role of renewable energy in the country’s overall energy mix.

He also announced that Ghana’s crude oil production had improved, rising from approximately 90,000 barrels per day to 126,000 barrels per day.

Dr Jinapor attributed the increase to government interventions designed to address operational difficulties that had affected oil producers. He said the government would continue working with companies in the industry to maintain growth in petroleum output.

The minister’s comments came as Ghana marked 15 years of the Petroleum Commission, the body responsible for regulating the country’s upstream petroleum industry.

He said the government’s energy strategy was focused on using more of Ghana’s domestic gas for electricity generation while gradually increasing renewable-energy capacity. The approach is intended to support a more secure and affordable power supply while moving the country towards cleaner sources of energy.

Dr Jinapor said the transition would not mean abandoning Ghana’s petroleum resources. Instead, the government plans to use the country’s existing oil and gas assets to support economic development while putting greater emphasis on renewable power over time.

The minister also said the government had paid a GH¢10.8bn coupon under the Domestic Debt Exchange Programme in full and on schedule.

The latest gas-use figures highlight the financial importance of Ghana’s domestic energy resources, particularly at a time when imported fuel costs can place pressure on electricity generation and public finances. Increasing gas production therefore forms a central part of the government’s efforts to strengthen the power sector and reduce exposure to external energy-market shocks.

Dr Jinapor said continued cooperation with petroleum operators, alongside investment in renewable energy, would be necessary if Ghana was to sustain higher oil production and achieve a broader transition towards cleaner energy.